EDU: Education Companies Have To Reset Business Based On New Regulatory Policies
EDU will report FY4Q21 results on August 3rd before the market opens with an 8am EST conference call. On July 24th, China’s central government issued a new set of guidelines for the after-school tutoring (AST) industry. While the policies are harsh, we believe there could be possibilities for companies to transform into entities that serve schools, parents and children. Such possibility resides in the fact that the government’s new policy also increases the workload of public schools by 25% - 30%, which we believe is beyond the capacity of current public schools. As such, the government indicates it will pay for “group-buy” of some resources from providers in the market. Theoretically, we believe EDU and TAL (TAL, $4.40, Not Rated) can be the best places to acquire such resources.
T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.
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